- The Washington Times - Monday, April 10, 2000

Last week was a time of unbelievable paradoxes in the American economy.The Justice Department won the first round in its bitter lawsuit against Microsoft, convincing a judge that the most successful technology venture in history has been too successful, and should be regulated by the people who defended the Post Office monopoly and swept the Clinton campaign-finance scandal under the rug.
Meanwhile, the U.S. economy's technology sector was in a nose dive on Wall Street in the midst of an era of record-breaking economic growth and one high-tech breakthrough after another. IBM, for example, announced last week it had developed a technique for making computer chips that are one-third faster than existing chips, as America continued to race ahead of every competitor on the planet.
Last week's Nasdaq collapse came at a time when the Internet is exploding as a major force across the global economy, spawning a whole new generation of e-commerce enterprises from here to China.
But most level-headed analysts on Wall Street saw the sharp decline in the Nasdaq as a long-overdue correction in a sector that is filled with too many wildly overpriced Internet stocks that have no profits, few assets, and whose volatility was distorting the rest of the market.
This is a healthy correction, in which tech money is flowing into larger and more stable technology companies such as IBM, Texas Instruments, Motorola and Intel, while the ruthlessly efficient free market downsizes a fat and overloaded Internet sector in preparation for its next upward climb.
"The high rate of new-company formation has led to an environment in which consolidation is a natural outcome, and that already is underway," said Tim Koogel, chief executive of the premier search and directory site Yahoo!, which reported net income of nearly $79 million for the past three months.
But what of the bizarre goings-on in Judge Thomas Penfield Jackson's U.S. District courtroom? The case was pushed by Bill Gate's enemies, Sun Microsystems, Oracle, Netscape and other embittered high-tech executives who were jealous of Microsoft's success. They whined and complained that their products were being pushed out of the marketplace by Microsoft, and got a bunch of liberal litigators in Bill Clinton's Justice Department to pursue a case that the Federal Trade Commission had decided was without merit.
These executives decided that, with a little help from their cronies in the White House (which they helped elect with their money), they could achieve in the courtroom what they could not achieve in the marketplace.
Judge Penfield's ruling is without merit. He claims Microsoft has stifled software competition in the marketplace and harmed consumers. But who are these injured consumers?
Walk into a software store anywhere in the country, and you can see that the shelves are loaded with competing software of every description and in every price range from Internet browsers to communications software. Consider the significant decline in computer prices. Major desktop models once sold for several thousand dollars, but now you can buy models more powerful than those sold in the early 1990s for just a few hundred dollars. One of them, built solely for accessing the Internet and e-mail, sells for $99.
For what it's worth, I do not use Microsoft products. I have been an Apple and Macintosh user for two decades, and have been perfectly content with a software program that I believe is superior to WordPerfect or Word for Windows.
But no one can argue with the fact that Microsoft has been responsible for the explosive expansion of the computer industry and the new business formations that have resulted.
In its aggressiveness to clinch deals with major computer makers and to defeat its competitors, Bill Gates may have played too hard at times. But that hardly calls for an antitrust action that threatens to destroy one of America's greatest success stories.
Now the case goes to the U.S. Court of Appeals, where Microsoft may get a more impartial hearing. The appeals court has sided with them before, and could throw out the entire case.
But if that does not happen, Bill Gates has a contingency plan that could save his company from one of the most partisan, politicized Justice Departments in the last 50 years.
If George W. Bush is elected president in November, this case is history. Bush, who hates trial lawyers and abusive government litigation with a passion, believes this case should never have been brought to trial. His first act as president would be to order his attorney general to drop the case, say those who know his thinking in the matter.
This case represents many things, but to the liberal legal zealots in the Justice Department, it is a desperate attempt to breathe life into the 110-year-old Sherman Antitrust Act a law that should have been revised many years ago. Its moss-grown, 19th-century provisions have little or no relevance to cooperative business ventures in our modern, high-tech era.
This case should be thrown out of court. Congress should begin work on modernizing our antiquated antitrust laws for a new century of free-market growth.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide